LINK/USDT (Chainlink), ENJ/USDT (Enjin), Technical Outlook, Edition #52 (15/07/21)

Chainlink and Enjin are two strong tokens built on the Ethereum network, providing powerful tools for developers and users. However, could a potential Bitcoin bear market cripple their massive growth?

Note: This article includes a lot of technical jargon, in order to better understand the concepts discussed, it’s recommended you have our “Cryptocurrency List of Terms and Definitions” open to maximise understanding.

This evening’s report will be community-focused and analyze the two most voted assets per our subscriber’s request.

The two assets with the most votes received are Chainlink ($LINK) and Enjin ($ENJ). In addition, the macrotrend for both altcoins will be mapped using a logarithmic scale instead of our usual linear one.

The Logarithmic Scale

Logarithmic price scales use the percentage of change to plot data points, so the scale prices are not positioned in equal distance. The reason why using the Log scale to chart more volatile altcoins is due to two main factors:

The first is to respond to skewness towards large values; This is when a few data points are much larger than the bulk of the other data, which is common in altcoin land.

The second is to show percent change between the different data points.

Chainlink Analysis

Chainlink, LINK/USDT - 1 Week (W1)

As you may have noticed, Log-scale omits a lot of the sporadic fluctuations in price and, in some cases, can work better than linear modelling.

This channel-like macro uptrend has held since Chainlink’s inception and exchange listing on Binance.

A W1 close below the 20 EMA (GREEN) and 50 MA (RED) is bearish; if Bitcoin falls further, then $LINK may see wick-lows to USD 7.

Some potential bullish news for Chainlink is its fight against MEV. MEV stands for “Miner/Maximum Extractable Value”, which essentially means miners can order transactions in a block how they please. This allows them to profit by either sandwiching transactions or front-running transactions to generate as much value from the block as possible.

Many individuals using the Ethereum network argue this is unfair, and transactions should be ordered on a first-come, first-serve basis.

Chainlink created the Fair Sequencing Service (FSS), which operates as follows:

In a nutshell, the idea behind FSS is to have an oracle network order the transactions sent to a particular contract SC, including both user transactions and oracle reports. Oracle nodes ingest transactions and then reach consensus on their ordering, rather than allowing a single leader to dictate it. Oracle nodes then forward the transactions to the contract SC. They sequence these transactions by attaching nonce or sequence numbers to them or sending them in batches.

This essentially means that transactions are not ordered to benefit a single party but fairly using multiple oracles on the Chainlink network to achieve consensus. This removes the ability for miners to front-run or sandwich transactions to gain financial advantage at the detriment of other network users.

More individuals may opt-in to use FSS, as it prevents the issues mentioned above, which would be bullish for the Chainlink oracle network.

Many individuals and traders have expressed hate for MEV as it increases the spread and cost of transactions, which could see FSS reach wide adoption in Dapps.

Enjin Analysis

Enjin, ENJ/USDT - 1 Week (W1)

Structurally speaking, Enjin looks much stronger than Chainlink; this is due to a successfully bounce off the W1 50 MA (RED), which is still holding as support for now. Should Bitcoin Dominance (BTC.D) rise and BTC/USD fall then, Enjin may see USD 0.40 – 0.50 SUD lows.

Furthermore, the recent expansion of the metaverse could yield bullish pressure for Enjin. The Enjin team invented the ERC-721 token standard, hence, responsible for kick-starting the NFT bull market. In addition, Enjin’s development of multiple SDKs (Software Development Kits) to aid developers in implementing NFT’s into different products could make Enjin the standard for creating and distributing NFT’s.

Axie Infinity has shown investors the power of the metaverse and tokenisation of game items. Hence, Enjin, a project which specialises in creating and distributing NFT’s, could become a solid cornerstone of the metaverse era.

Q’s Conclusion

While Bitcoin dominance rises and BTC/USD falls, then altcoins may see further downside. Refer to their W1 log scales to see overall macro trends and be patient. Let the market do the work and come to you

See you again for the next update.

- q

Leave a comment

Follow us for more detailed analysis on all markets, including Decentralised technology. Check out the links below

Subscribe to our newsletter, with daily content free for a limited time only:

Join our Facebook group and speak with likeminded traders:

Like our Facebook page for future updates:

Follow us on LinkedIn for future updates:

Keep up with us on Twitter:

Share Qluster Research

The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions